I’ve discussed the webcasting issue before, and it’s good to see a (more) mainstream news organization like NPR give the issue fair shake. It’s becomes increasingly clear that in its strongarm tactics to have all-encompassing control over its product, the recording industry is actually stunting its ability to make profits off digital music, either from webcasted radio or downloads. By making severe demands–and lobbying Congress to back up those demands in law–they’ve provided a strong disincentive for the radio industry and consumers to play ball with them.

Perhaps they missed their economics class, or have lost their faith in the market? If they set their on-line webcasting royalties rate too high and therefore only a few stations decide to continue webcasting, then their profits pretty small–they’ve obviously priced their product above what the market will bear. But if they price their royalties at a rate that most stations can afford, the profits will likely come rolling in–they have to price it at what the market will bear.

Please excuse my little foray into simplistic market economics. I only bring it up because that is the very philosophy that the RIAA hides behind when it wants things its way, but only when it’s convenient. In the real world, we can see that the radio market barely resembles a real market because of massive consolidation and monopolistic control, so it’s understandable why the RIAA might need strongarm tactics, even if not forgiveable. But the unfortunate part of this is that independent, non-profit and community stations get caught up in this tide of uncertainty, and so are also given disincentive to broadcast online.

Frankly, I’m glad to the see the recording industry shoot itself in the foot, and I find it hard to miss hearing the same 40 crappy hit singles repeated ad naseum on 40 different webcasts from 40 different stations across the country. And if this only hurt the RIAA and Clear Channel Communications, I wouldn’t shed a tear. But the battle is larger than that, and it significantly affects the ability of the Internet to be a haven for challenging, independent music programming that the hype and conventional wisdom have said it was supposed to be.